Prime Minister Mark Carney is failing his own standards on spending, according to a new analysis. In November, Carney released a budget projecting $588 billion in spending for the year. He repeatedly promised to reduce expenditures, stating in the House of Commons, "We are going to spend less to invest more." However, after just six months, his budget update reveals spending will reach $594 billion—$6 billion over budget.
Why the Overspend?
The overspending is not due to external pressures like U.S. President Donald Trump or the Middle East conflict. In fact, federal revenues are $6 billion higher than forecasted, partly due to the conflict's initial economic benefits. Instead of using this extra cash to reduce debt, Carney chose to spend it, continuing former Prime Minister Justin Trudeau's legacy of borrowing.
Borrowing and Debt Interest Soar
The federal government will borrow $65 billion this year, with no plan to balance the budget. Carney aims only to reduce the deficit to $53 billion by 2030. This borrowing leads to massive interest payments: $59 billion this year, or $1,400 per Canadian. That sum exceeds federal health transfers to provinces or sales tax revenue.
For perspective, debt interest payments have nearly tripled in a decade, from $20 billion to $59 billion. By 2030, they will reach $80 billion, consuming 13 cents of every tax dollar. This undermines potential spending on nurses, potholes, or tax cuts.
Comparison with Trudeau
Carney sold himself as different from Trudeau, but his borrowing plans are worse. From 2025 to 2029, Trudeau planned to borrow $112 billion; Carney plans $242 billion—more than double. While some factors are beyond control, Carney can control spending. Overspending $6 billion within six months of his own budget merits a failing grade.
Franco Terrazzano is the federal director of the Canadian Taxpayers Federation.
